It really shouldn't be relevant. Your title company will usually handle closing (apparently where you are form the agent does this? Here, the agent usually helps you so you don't have to deal with the title company, but the title company is responsible), and they will deal with the previous mortgage company. Usually you should have title insurance in case a problem does crop up (required for most lenders)- and your title company can deal with it. So the real nightmare is when your title company handling the transaction is a problem. (Usually the seller chooses the title company, but this can be negotiated between buyer and seller, and many sellers are more than happy to use the title company of your choice- if you pay for it).

Title company? Title insurance?!? A third-party for-profit company handles some aspect of the transfer of property, instead of, you know, government? And in case this third party fucks up, you need to pay for insurance?!?

Jesus.

You said the real estate agent handles it where you are from- are real estate agents government officials where you are? You don't have to have a title company, you could do it yourself, but a typical real estate transaction involves large amounts of money and multiple parties, so most people want someone else to handle it all. If you are borrowing money, you lender will probably insist on it.

This is how it works in Sweden, as far as I understand it:

Real estate agents have to be licensed, and part of their duties is of course to verify that the seller is who they say they are and that they own the thing they're trying to sell. When I sold an apartment, I had to show my ID to my agent so he could verify me.

The registry of who owns what pieces of land is managed by a government office, and government data is by legal default public, so checking if a seller actually owns a piece of land is trivial. You don't need to chase down a distributed sealed deed history thing thing, it's basically a single national database at this point.

So it's really simple to do, and the responsibility is on the seller's agent, who in turn has a strong incentive to not screw up, or they lose their license and their job.

When you go to your lender for a pre-approval on a mortgage, they want to know which piece of property you're buying, and they typically check that it's being sold by a licensed real estate agent, because if it is, then they can be assured that the seller is verified and actually can sell the property.

When you sign the purchase contract - which is typically one or two pages long - you sign one copy for the seller, one for the buyer, one for the agent, and one for the government office, and the agent helps you fill out the (short) form that goes with it so you can send it in and get the ownership legally transferred to you. That's it.

There's so little work involved with verifying ownership and transferring ownership, that it's just put on the shoulders of the real estate agents. The idea that you would need yet another party to handle this aspect is completely ludicrous in Sweden, it makes no sense.

No. There are no loan assumptions in US. Seller’s mortgage holder is irrelevant.

Ok. Good. :-)

So why was Klathmon's friend bothered by it?

Because now his friend is forced to be a customer of Bank of America unless he goes through a refinancing process. Even then, unless he's very careful, he could end up refinancing with a company who turns right back around and sells the mortgage back to Bank of America. The same thing happened to me. I've had two mortgages through other banks who then sold my mortgage to Wells Fargo forcing me to have to deal with them and I had absolutely no say in it.

In his case Bank of America attempted to forclose on a house he bought after he bought it.

I presume your friend had title insurance, and the title company dealt with it?

Oh I'm sure, I didn't follow it all that closely but I remember it being resolved within a few weeks, but the headache was apparently enough for him to want to avoid sellers with BofA in the future.